What we focus on shows up in our results. As private practice owners, we focus on creating a business that revolves around us. The practice is dependent on our direct involvement and activities daily. We are, by our actions, irreplaceable. Initially, that feels good. In time, the drudgery and monotony of solving the same problems lead to burnout and frustration.

As we grow our business, we are generous in giving our time to the effort. The buck stops with us. Revenues measure success: more is better. The professional practice owner does it all, from providing direct services, human resources, accounting, and custodial.

Trading one’s time for money is called “transactional” or active income. It is the very foundation of our educational system to create workers. Workers produce goods and services which others purchase. The division of labor is a highly efficient model.

Traditional “retirement planning” rests on this societal model. Saving some of the money acquired through 30-40 years of active labor and investing through various financial vehicles and tax-deferred plans offered through Wall Street conduits.

When your body and mind are worn down and no longer capable of producing, then you can live the remainder of your years with what funds you have saved away. Hopefully there will be enough to outlast your lifespan.

Wealth is What You Own, Not What You Do

In my recent book, “Own Your Freedom,” co-authored with Dan Kennedy, one of the principles of Freedom is that “wealth is what you OWN, not what you DO.” The mindset shift from transactional (active) income to asset-produced (passive) income is the most significant fulcrum in creating financial independence.

Replacing your active income with asset-produced income should be the goal from day one.

Without creating a Plan B of passive income, the high-income producer only serves to elevate his lifestyle while digging deeper into the ever-running hamster wheel of transactional income. We sell our lives one day at a time for some undefined future. I call this “the curse of the high-income earner.”

Passive income comes from owning cash flow producing assets. Wall Street does not have a strong model for this. Aside from dividend stocks (typically offering very low rates of return), Wall Street products are fundamentally speculative. They are based on the expectation that the stock you have purchased will go up in value at some point in the future. That is not the same as owning an asset that creates recurring income on a predictable basis.

Once your passive income (asset-based income) replaces even a percentage of your active income, the pressure is off! Dr. Ben Jensen, a fellow Freedom Founders member, said it best, “When you no longer need the crown, everything changes – everything!”

What if you could become independent from dependence on your active, earned income decades before “retirement age”?

What would change for you? How would you live your life differently as a result?

Who Else is Paying a Price for Your Success?

I believed for many years that my primary goal should be building more income and net worth. I had no idea how much was enough. I just knew I needed to produce more. Everyone else paid the price: my family, health, and lack of being a “good and empathic person.” It was all about MY goals.

If more income is the goal, who else besides you is paying a price for this misplaced priority? Your son, your daughter, your spouse?

The deception is that “someday,” when we have “enough,” we will turn the tide, create new habits and begin to enjoy life (and become a better person). Warning: change does not happen without a definitive plan… or else a wakeup call.

My wakeup call came without warning when my 3-year-old daughter Jenna was diagnosed with Leukemia. In the ensuing health battle, her liver failed (due to the chemo).

I’ll never forget the moment I was sitting on that hard, vinyl hospital chair, listening to the hum of the machines that were keeping my girl alive as I held her limp little fingers in my hand. All of my education, wisdom, and experience; even all of the money I could earn—none of it mattered. None of it could make a difference. I could only hope. 

In that moment, the only thing that mattered was time. I realized that every moment together was a gift that no amount of money could ever buy back.

It was during Jenna’s initial weeks of transplant recovery while spending day after day at Texas Children’s Hospital in Houston, that I made a critical and life-changing decision. 

A moment of truth: I would no longer practice dentistry.

(Note: Today, Jenna is going to college and uses the story of her experience as an inspiration for many. She is a fighter, my girl.)

Playing it “Safe”

Risk, opportunity, and forward progress are our playgrounds during our youthful years.  We fear little. Stumbles and outright failure come with the territory. Watch the infant begin to find his legs and try the first steps. Unsteady, shaky, and many outright failures until a level of balance and coordination is finally found.

As we grow and mature, the directive is to “be careful, don’t stand out, don’t ask or answer a question, or it may reveal some hidden deficiency.” “Don’t take a chance.”  “Don’t rock the boat.” “Don’t ruffle the feathers.” “Keep your head down and maintain the status quo.”

Focusing early on a career with the promise of financial and lifestyle security, I ensured my college GPA didn’t waiver. I registered for optional courses outside the core sciences that were no-brainers for an A. I left a lot on the table in other transferable skill sets that could have served me well if I would’ve had the courage and insight to venture forth: music, theater, communications, and speech, for example.

Misdiagnosis = Misprescription

Many of the clients I work with begin with no idea how much money they think they want or need. They toss out rounded numbers that have no mathematical basis. When I ask them how they intend to reach this arbitrary number, they have no idea – no plan.

Specificity is the Key!

This revelation is life-changing! How do I know? I’ve personally experienced it and have now witnessed hundreds of professional practice and business owners achieve the same peace of mind well before the conventional “retirement age.”

Replacing your active income should be the goal from day one. For most, it is not. Instead, the focus is on active income, leading to a “well-deserved” elevated lifestyle that forces you to improve your labor skills, to work longer and harder. Time is never a consideration. We willfully sacrifice time at the cost of relationships, health, and purpose.

Optimizing Money or Time?

One of the models I use in our Freedom Founders community is “The Five Freedoms.” It is a pyramid similar to that created by Abraham Maslow (see Maslow’s Hierarchy of Human Needs). Maslow’s model explains how the human progresses from the pyramid’s base, beginning with survival, ascending upward to safety and stability, love and community, contribution and self-worth, and finally, to self-actualization (purpose, meaning, and impact).

In my Five Freedoms™ model, the ascension is financial independence to freedom of time, freedom of relationships, health and finally purpose and meaning. In this model, the ascension is not linear but concurrent. Time is the great differentiator in this model.  Time is valued from the beginning instead of suppressed to some mystical future date.